What is subrogation and how does it impact your injury claim?

Subrogation explained

Subrogation is the process in which an insurance company seeks reimbursement for what they have paid. Subrogation rights vary based on what insurance plan is seeking reimbursement and what state or federal law applies. For example, in Kansas, your car insurance company may use subrogation to seek reimbursement for medical expenses they paid on your behalf to your medical providers under your personal injury protection coverage.

Subrogation can also be pursued by your health insurance plan for medical bills paid on your behalf in an accident. One clue that this may be happening is if your health insurance company has sent you or your lawyer a “subrogation survey” asking how the accident occurred and what liability insurance companies are involved. Your response to this survey may directly impact on the amount of money you keep from your injury claim.

Subrogation or reimbursement of your health insurer is generally not permitted under Missouri or Kansas law, unless a federal law or some other exception applies. For example, in certain cases, a federal law called ERISA may apply as described below. Also, Medicare and Medicaid are entitled to reimbursement. In these situations, it is important to take into consideration the amount of money that you will have to pay back from any proceeds you receive. An experienced personal injury attorney can explain the subrogation process in more detail and help you through it.

Watch out for ERISA Subrogation

If your medical bills were paid by health insurance of an employer’s health plan, the insurance plan may want you to reimburse it out of any personal injury recovery. Even though the laws in some states, including Missouri and Kansas, generally prohibit such claims, a federal law called ERISA (The Employee Retirement Income Security Act of 1974) can preempt state law. An ERISA plan is a health insurance plan self-funded by an employer that is governed by federal law and that may have a right of subrogation or reimbursement written into the plan. Not all employer health insurance plans are governed by ERISA.

The area of law known as “reimbursement” or “subrogation” can be very complicated. Your attorney must understand the implications of state and federal law, including ERISA, on your case.

Medicare & Medicaid Liens

There are also liens that may affect what you ultimately get paid in your case. If your bills were paid by Medicare, Medicaid, or Tricare, you may be forced to pay back a portion of your settlement as reimbursement for costs paid by government sponsored health insurance. We routinely help our clients navigate these complex issues and reduce these liens to the extent legally possible.

Contact Our Kansas City Injury Lawyer

For more information about personal injury claims in Missouri and Kansas, please download a free copy of my book, Crash Course, from our website. You can also contact our Kansas City personal injury law firm by calling (816) 203-0143 or by filling out a form on our Contact Us page. We help folks in accidents throughout Kansas and Missouri navigate complex insurance issues and injury claims and would be happy to provide some guidance. Contacting us is FREE and confidential, and there is no obligation to hire our firm, so call today.